Renault CEO warns chip crunch will ripple through 2022

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Renault CEO Luca de Meo said the effects of the global semiconductor shortage will be felt through next year, a warning that doesn’t bode well for a recovery in auto production.

Major suppliers have cautioned Renault that the shortage is “a structural thing that will be with us through 2022,” de Meo said Wednesday on the sidelines of a French parliamentary hearing. “There will be tension in the system even if production capacity is improving,” he said.

“We have managed in the first half, but of course we have lost volumes,” de Meo said. What is frustrating for the industry is that visibility on supplies “changes every week,” he said.

De Meo’s comments indicate the supply crunch, which many automakers including Renault expected to peak during the second quarter, could continue to weigh on auto output for longer.

Daimler and Jaguar Land Rover this week said that sales will be further hit on chip supply shortfalls.

Jaguar Land Rover flagged deliveries in the second quarter will be 50 percent worse than initially expected, while BMW on Wednesday said it may face further adjustments to production for the remainder of the year.

Daimler’s Mercedes-Benz said Tuesday that deliveries during the second quarter were “significantly” curtailed by a lack of chips.

De Meo has said the crisis could lower Renault’s output this year by at least 100,000 vehicles, a number he declined to comment on Wednesday.

A shortage of automotive chips that began late last year as consumer demand for personal devices soared amid pandemic lockdowns has persisted through 2021.

The shortage is threatening to slash $110 billion in sales from the car industry, consulting firm AlixPartners forecast in May, and has forced auto manufacturers to overhaul the way they get the electronic components.

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